How low can the VIX go??

Putting Bollinger Bands around the VIX shows a dramatic squeeze in volatility. The bands haven't been this tight in years. The VIX has been drifting between 24 and 22 for almost 2 months now. It looks to be setting up for a major move upwards.

The VXN is near an all time low. Quite ironic considering the savage Nasdaq bear market of the last few years. The lower it goes the more optimistic people feel. From a contrarian's point of view, thats not very bullish.

If the VIX goes below 20, that would be my signal to load the boat with more sept dia and spx puts.

Low Vix numbers for the last 2 months coupled with a major Bradley Stock Market Model Indicator top around July 1st is setting up a major sell off in the markets. Time to lock in some profits. Gone too far too fast.

The VIX may be responding to a surge of supply from calls/puts that are caused by the scorchingly hot convertible market. Hedge funds that usually take these secondaries sell puts/calls on them either to earn more yield or to lock in some insurance.

I'd argue that the investor intelligence numbers confirm the complaceny in the market. Look at a 5 year weekly chart of the VIX. It's never "different this time". This will be a major turning point in the market.

from a respected stock market newsletter writer who was neutral / bearish and now thinks things look much better

he cites the COPPOCK indicator as being extremely close to a buy
signal

Low Vix numbers for the last 2 months coupled with a major Bradley Stock Market Model Indicator top around July 1st is setting up a major sell off in the markets. Time to lock in some profits. Gone too far too fast

Putting Bollinger Bands around the VIX shows a dramatic squeeze in volatility. The bands haven't been this tight in years. The VIX has been drifting between 24 and 22 for almost 2 months now. It looks to be setting up for a major move upwards.

The VXN is near an all time low. Quite ironic considering the savage Nasdaq bear market of the last few years. The lower it goes the more optimistic people feel. From a contrarian's point of view, thats not very bullish.

If the VIX goes below 20, that would be my signal to load the boat with more sept dia and spx puts.

More...

JB

I've spent the last week or 2 looking very closely at the OOM puts, and working on figuring out possible positions, but not because of the VIX, but more as a result of looking at the daily index charts themselves, and the squeeze that has come into the tripple witching this time around.

Maybe the markets are going to continue upwards, I don't know, but usually there will be some kind of a retracement for profit taking/consolidation. The rise from the recent lows has been very dramatic, and at a pace that would over the longer term be unsustainable IMO.

So while not necessarily looking for a top here, certainly preparing for a down leg and next quarter puts look interesting indeed. I'm not even sure that any kind of down leg is pricing in OOM atm. It doesn't appear to be there...

Your post is almost as if you read my mind - Same conclusion different method of arriving there